Trends of Institutionalization in the Cryptocurrency Derivatives Market

The cryptocurrency derivatives market is set to explode in 2024: 1) Daily trading volume of options DEX reaches $50 billion; 2) Total market size of prediction markets reaches $15 billion; 3) Volatility ETF managed assets exceed $10 billion. Characteristics of institutional participation are significant: 1) Block trades account for 90% (average single trade amount of $200 million); 2) Issuance of structured products increases by 3000%; 3) Hedge funds have a derivatives coverage rate of 99%. Retail investors must pay attention: 1) Leverage should be controlled within 0.5 times; 2) Gamma risk amplifies 10 times during the week of options expiration; 3) Beware of liquidity traps (avoid bid-ask spreads greater than 3%). Professional advice: 1) Derivatives allocation should not exceed 1% of total assets; 2) Prefer regulated platforms such as CME and Deribit; 3) Prepare protective strategies for black swan events (such as buying out-of-the-money Put options).